Stellantis N.V. STLA shares are trading higher premarket Tuesday. The United Auto Workers (UAW) union reportedly disclosed that some local units at the company plan to file grievances.
The units could also initiate a nationwide strike, alleging the company has failed to meet its production commitments, reported Reuters.
UAW President Shawn Fain referred to the issue on Monday, “Let me be clear: Stellantis must keep the promises they made to America and our union contract. And the UAW will take whatever action necessary at Stellantis or any other corporation to stand up and hold corporate America accountable.”
The UAW stated that the local units represent tens of thousands of workers, and the dispute centers on agreements Stellantis allegedly made in 2023 as part of a new labor deal.
In November 2023, the Chrysler-parent company committed to a new $3.2 billion battery plant and a $1.5 billion investment in a mid-size truck factory in Illinois, aiming to add 5,000 total U.S. jobs by 2028.
The UAW stated that Stellantis would not proceed with the Illinois investments on the originally agreed-upon timetable, though specific dates were not mentioned.
In July, the Department of Energy (DOE) is preparing to grant Stellantis $334.8 million to repurpose the closed Belvidere Assembly plant for electric vehicle (EV) production and another $250 million to convert its Indiana Transmission Plant in Kokomo into a facility for manufacturing EV components.
The report quoted UAW as saying that since 2023, “the company has gone back on its product commitments at Belvidere and has been unreceptive in talks with the union to stay on track.”
The UAW added, “This glaring violation of the contract imperils all of the other investment commitments the company has made.”
Read: Stellantis US Recalls Plug-In Hybrid Minivans Due to Fire Risks
Last week, shareholders in the United States reportedly sued Stellantis, accusing the automaker of fraud by hiding rising inventories and other weaknesses, leading to disappointing earnings and a subsequent drop in its stock price.
Price Action: STLA shares are up 0.43% at $16.36 premarket at the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by Jonathan Weiss on Shutterstock
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